| A and B are partners in a firm sharing profits and losses in the ratio of 2 :1. On 1st April, 2017 they decided to admit C into partnership for 1/5th share in the profits. For this purpose, goodwill was valued at 80% of the average annual profits of the previous four years. The profits of the last four years were : |
| 31.3.2014 ............................................1,67,000 |
| 31.3.2015 ............................................1,56,000 |
| 31.3.2016......................................................................1,92,000 |
| 31.3.2017 ........................................................(10,000) |
| The value of goodwill of the firm: |
A) 1,00,000
B) 1,01,000
C) 1,02,000
D) 1,04,000
Correct Answer: B
Solution :
1,01,000
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